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Eurozone crisis live: Spain set to request banking bailout on Saturday Eurozone crisis live: Spain set to request banking bailout on Saturday
(40 minutes later)
12.45pm: Another update from Euro 2012, where fans have been putting their own spin on the financial crisis. Outside the England hotel, Spanish fans are being taunted with "You're going down with the euro". Meanwhile, the Irish taking a stand against the German Chancellor
@spin1038 great picture!
— Aurora Rose Kennedy (@Rose_Kennedyy) June 8, 2012
12.30pm: Thank you Twitter. #Spailout has joined #Spanic and #Grexit as a hot new hashtage. If the mooted bailout fails to materialise, they could soon be joined by #Spainout
12.19pm: News in from Greece where our correspondent Helena Smith says despite worsening figures on every level, the country's economic crisis has been eclipsed by the fallout over Thursday's extraordinary live TV attack of two female politicians.
This morning's data shows the Greek economy contracted 6.5% in Q1 from a year ago and industrial production fell 2.2% in April versus a year ago, but the only subject of debate is the Greek parliament's very own watergate scandal.
Footage of the far right Golden Dawn party spokesman throwing water at one of the MPs and punching another has not only become the fodder of nationwide debate – it has prompted anti-fascist groups to announce mass protests nationwide. Helena writes:
From newspapers, to TV channels, radio stations and internet news portals, the talk of Greece this morning is not of the economy but the rise in violence that Golden Dawn spokesman Ilias Kasidiaris' extraordinary on-screen assault has so shockingly highlighted.
More than 24 hours have elapsed since the 31-year-old far right spokesman lashed out at left-wing MPs Liana Kanelli and Rena Dourou during a live TV debate ahead of general elections on June 17. But although Kasidiaris, now the focus of a nationwide manhunt following a state prosecutor's order for his arrest, remains at large the physical attack has put the spotlight on the neo Nazi Golden Dawn as never before.
"No to Violence" proclaimed the mass-selling daily Ta Nea on its front page next to panel of pictures of some of the politicians, writers, authors and even singers who have been assaulted since the outbreak of the debt crisis because of their views.
"With his fist Chrysi Avgi (Golden Dawn's) candidate MP has unmasked the neo-Nazi organization which, with the votes of 440,985 Greek men and women, got into the short-lived parliament of the 6th May," the paper wrote. "Now, no one can get off the hook by citing ignorance – these people have shown their true face."
Across the media today there is much talk that in a society that has become increasingly divided between rich and poor, left and right, the attack could be a precursor of worse to come. Memories of the civil war remain vivid among the older generation. "After months of extreme hate speech violence has climaxed," wrote communications expert Vivian Ethymiopoulou in Ta Nea. "From verbal run-ins and yoghurt throwing we have officially passed to acts of personal revenge and daggers being drawn."
Thousands are expected to take the streets of at least six major cities across Greece to protest against Golden Dawn and the rise in recent months of violence against immigrants, students and workers that the extreme right has been blamed for.
Meanwhile, a massive manhunt for Kasidiaris has been launched
the spokesman of the Hellenic police force Thanassis Kokkalakis says. "There are special units all over Greece looking for him," Kokkalakis told me. "Our belief is that he is hiding in the knowledge that the arrest warrant runs out at one minute past midnight tonight. He doesn't want the media all over him, showing him in handcuffs ahead of the election."
If police fail to arrest the Golden Dawn representative, who now faces charges of grievous bodily harm, he will be free to circulate until the wheels of Greek justice splutter into action. Golden Dawn has refused to condemn or even reprimand Kasidiaris for Thursday's assault, instead saying he was "provoked."
11.58am: New source affirming that rumoured eurozone ministerial conference call is planned for Saturday. Steve Collins, London & Capital Asset Management's well informed global head of dealing has just tweeted the following:11.58am: New source affirming that rumoured eurozone ministerial conference call is planned for Saturday. Steve Collins, London & Capital Asset Management's well informed global head of dealing has just tweeted the following:
Now getting confirmation that there WILL be a conference call on Spain over the weekend ... (EUR-group) fin mins ...Now getting confirmation that there WILL be a conference call on Spain over the weekend ... (EUR-group) fin mins ...
— Steve Collins (@TradeDesk_Steve) June 8, 2012— Steve Collins (@TradeDesk_Steve) June 8, 2012
11.52am: The eurozone has instruments ready to use should Spain ask for help recapitalising its banks, but no such request has been made, according to the European Union.11.52am: The eurozone has instruments ready to use should Spain ask for help recapitalising its banks, but no such request has been made, according to the European Union.
EU spokesman Amadeu Altafaj has given a news briefing, responding to a Reuters report that Spain is ready to request a bailout. Altafaj would not confirm the report that a conference call between the finance ministers of the euro's 17 member nations has been scheduled for Saturday morning. The suggestion is that Spain's request for help would follow the call. Altafaj said:EU spokesman Amadeu Altafaj has given a news briefing, responding to a Reuters report that Spain is ready to request a bailout. Altafaj would not confirm the report that a conference call between the finance ministers of the euro's 17 member nations has been scheduled for Saturday morning. The suggestion is that Spain's request for help would follow the call. Altafaj said:
If such a request were to be made, the instruments are there, ready to be used, in agreement with the guidelines agreed in the past, in 2011. We are not at that point.If such a request were to be made, the instruments are there, ready to be used, in agreement with the guidelines agreed in the past, in 2011. We are not at that point.
11.40am: Reuters newsflash:11.40am: Reuters newsflash:
EU Commission: If a request for aid is submitted by Spain, the appropriate instruments are available and ready to be usedEU Commission: If a request for aid is submitted by Spain, the appropriate instruments are available and ready to be used
11.17am: Faisal Islam, Channel 4's economics editor points to the parallels between the Euro crisis 2012 and the Euro 2012 football tournament. It appears economic success is inversely correlated with footballing prowess. The last four cups have been won by Spain (twice), Italy and Greece, and Sunday's match between Spain and Italy is being dubbed the 'debt derby'. Optimistically, Islam adds:11.17am: Faisal Islam, Channel 4's economics editor points to the parallels between the Euro crisis 2012 and the Euro 2012 football tournament. It appears economic success is inversely correlated with footballing prowess. The last four cups have been won by Spain (twice), Italy and Greece, and Sunday's match between Spain and Italy is being dubbed the 'debt derby'. Optimistically, Islam adds:
There has, in the past, been research showing growth is boosted in host nations, temporarily, particularly if that nation does well. It's remotely possible that the euro won't even survive Euro 2012 intact, depending on how other nations react to a new Greek government.There has, in the past, been research showing growth is boosted in host nations, temporarily, particularly if that nation does well. It's remotely possible that the euro won't even survive Euro 2012 intact, depending on how other nations react to a new Greek government.
11.13am: Apologies for our temporary absence, gremlins in the system at the end of a long week. Our blog has now been bailed out and is again live.11.13am: Apologies for our temporary absence, gremlins in the system at the end of a long week. Our blog has now been bailed out and is again live.
Back to the Reuters scoop on the Spanish bank rescue. Four senior EU officials and one German source have now told the news agency that a conference call of ministers from the 17-nation currency area would be held on Saturday to discuss a Spanish request for aid. This would be followed by an announcement on Saturday afternoon.Back to the Reuters scoop on the Spanish bank rescue. Four senior EU officials and one German source have now told the news agency that a conference call of ministers from the 17-nation currency area would be held on Saturday to discuss a Spanish request for aid. This would be followed by an announcement on Saturday afternoon.
Right now, the Spanish are playing down the possibility of an imminent bailout plan, according to foreign exchange news service Ransquawk:Right now, the Spanish are playing down the possibility of an imminent bailout plan, according to foreign exchange news service Ransquawk:
Spain govt says not aware of any pending announcements on bank rescue". ...any decision looks unlikely until bank audits are seen next week.Spain govt says not aware of any pending announcements on bank rescue". ...any decision looks unlikely until bank audits are seen next week.
Ratings agency Fitch said the cost of recapitalisation for Spain's busted banks could be between €60bn and €100bn.Ratings agency Fitch said the cost of recapitalisation for Spain's busted banks could be between €60bn and €100bn.
An International Monetary Fund report, due to be published on Monday, is expected to
estimate the banks needs at the lower figure of €40bn, but market data has deteriorated since that data was collected.		An International Monetary Fund report, due to be published on Monday, is expected to
estimate the banks needs at the lower figure of €40bn, but market data has deteriorated since that data was collected.
"The announcement is expected for Saturday afternoon" an EU official said, while the German source added "The government of Spain has realised the seriousness of their problem"."The announcement is expected for Saturday afternoon" an EU official said, while the German source added "The government of Spain has realised the seriousness of their problem".
Spailout (by @presseuropit) twitter.com/FGoria/status/…Spailout (by @presseuropit) twitter.com/FGoria/status/…
— Fabrizio Goria (@FGoria) June 8, 2012— Fabrizio Goria (@FGoria) June 8, 2012
More pain for Spain as Fitch followed its sovereign debt downgrade with a lower rating for the country's utilities. Enagas and Red Electrica Corporacion have had their long term issuer default ratings reduced to A- with a negative outlook.More pain for Spain as Fitch followed its sovereign debt downgrade with a lower rating for the country's utilities. Enagas and Red Electrica Corporacion have had their long term issuer default ratings reduced to A- with a negative outlook.
9.40am: British factory gate inflation slowed to its lowest rate in two-and-a-half years in May.9.40am: British factory gate inflation slowed to its lowest rate in two-and-a-half years in May.
Hopes that easing consumer price inflation would boost consumer spending this year were lifted by news that output prices fell 0.2% from April, defying the 0.1% increase which had been forecast.Hopes that easing consumer price inflation would boost consumer spending this year were lifted by news that output prices fell 0.2% from April, defying the 0.1% increase which had been forecast.
The producer prices numbers from the Office of National Statistics marked the lowest output price inflation since November 2009. Input prices fell further than at any time since December 2008, falling 2.5% compared to the 1.3% forecast.The producer prices numbers from the Office of National Statistics marked the lowest output price inflation since November 2009. Input prices fell further than at any time since December 2008, falling 2.5% compared to the 1.3% forecast.
A contrasting view from the Bank of England's inflation attitudes survey, also just out, which shows Britons expect prices to climb faster over the coming year than three months ago.A contrasting view from the Bank of England's inflation attitudes survey, also just out, which shows Britons expect prices to climb faster over the coming year than three months ago.
The May inflation attitudes survey showed the public think inflation will reach 3.7% over the next 12 months, up from an expected 3.5% in February, and the highest since November.The May inflation attitudes survey showed the public think inflation will reach 3.7% over the next 12 months, up from an expected 3.5% in February, and the highest since November.
UBS analyst Amit Kara said:UBS analyst Amit Kara said:
The procuder price numbers are clearly below market expectations, but they only really relate to goods prices in the overall inflation index and as such I don't think that will have a material impact on the policy decision. More interesting is the Bank of England inflation expectation survey which has climbed. I think given the persistence in inflation this will be of some concern to the monetary policy committee. The threshold for another round of quantitative easing is a little bit higher as a result.The procuder price numbers are clearly below market expectations, but they only really relate to goods prices in the overall inflation index and as such I don't think that will have a material impact on the policy decision. More interesting is the Bank of England inflation expectation survey which has climbed. I think given the persistence in inflation this will be of some concern to the monetary policy committee. The threshold for another round of quantitative easing is a little bit higher as a result.
9.16am: Italian industrial production fell more dramatically than expected in April, with the eurozone's third largest economy still deep in recession.9.16am: Italian industrial production fell more dramatically than expected in April, with the eurozone's third largest economy still deep in recession.
April output fell 1.9% from the previous month, far outstripping the 0.5% decline predicted by a survey of 18 analysts.April output fell 1.9% from the previous month, far outstripping the 0.5% decline predicted by a survey of 18 analysts.
On a work-day adjusted basis, output in April fell 9.2%, the biggest fall since November 2009.On a work-day adjusted basis, output in April fell 9.2%, the biggest fall since November 2009.
National statistics institute ISTAT marginally revised Italy's March data to a 0.6% increase, up from the 0.5% rise originally reported.National statistics institute ISTAT marginally revised Italy's March data to a 0.6% increase, up from the 0.5% rise originally reported.
Breaking news from Eloi Eloi on TwitterBreaking news from Eloi Eloi on Twitter
EUROGROUP CONFERENCE CALL TO TAKE PLACE ON SATURDAY TO DISCUSS DETAILS - TWO EU SOURCESEUROGROUP CONFERENCE CALL TO TAKE PLACE ON SATURDAY TO DISCUSS DETAILS - TWO EU SOURCES
— Eloi Eloi (@LemaSabachthani) June 8, 2012— Eloi Eloi (@LemaSabachthani) June 8, 2012
Spain is expected to request a bailout over the week-end, according to EU sources. The request would follow a conference call of eurozone finance ministers on Saturday.Spain is expected to request a bailout over the week-end, according to EU sources. The request would follow a conference call of eurozone finance ministers on Saturday.
"The announcement is expected for Saturday afternoon," an EU official told Reuters."The announcement is expected for Saturday afternoon," an EU official told Reuters.
8.57am: Brent crude oil prices fell below $99 this morning, as the world's top oil consumer the United States held off from a third round of quantitative easing.8.57am: Brent crude oil prices fell below $99 this morning, as the world's top oil consumer the United States held off from a third round of quantitative easing.
Bernanke's testimony to congress on Thursday offered to clues that he was close to a new round of electronic money printing.Bernanke's testimony to congress on Thursday offered to clues that he was close to a new round of electronic money printing.
Brent crude for July traded $2.09 lower at $97.84 a barrel just before 9:00 BST, and is poised to fall for a sixth week in a row, its biggest losing streak since December 1998.Brent crude for July traded $2.09 lower at $97.84 a barrel just before 9:00 BST, and is poised to fall for a sixth week in a row, its biggest losing streak since December 1998.
8.48am: European stock markets have opened lower, retreating from a one-week high after Spain's savage credit rating downgrade yesterday evening and hopes of a new US stimulus round fading.8.48am: European stock markets have opened lower, retreating from a one-week high after Spain's savage credit rating downgrade yesterday evening and hopes of a new US stimulus round fading.
FTSE 100: down 37 points to 5410, -0.7%
German DAX: down 61 points to 6083, -0.99%
French CAC: down 34 points to 3037, -1.12%
Spanish IBEX: down 64 points to 6374, -0.99%
Italian FTSE MIB: down 187 points to 13356, -1.38%		FTSE 100: down 37 points to 5410, -0.7%
German DAX: down 61 points to 6083, -0.99%
French CAC: down 34 points to 3037, -1.12%
Spanish IBEX: down 64 points to 6374, -0.99%
Italian FTSE MIB: down 187 points to 13356, -1.38%
The Eurozone's fourth-biggest economy moved a step closer to a financial bailout on Thursday evening as ratings agency Fitch downgraded Spain from A to BBB, a notch above junk status.The Eurozone's fourth-biggest economy moved a step closer to a financial bailout on Thursday evening as ratings agency Fitch downgraded Spain from A to BBB, a notch above junk status.
Fitch blamed mistakes at a European level which had allowed the financial crisis to escalate.Fitch blamed mistakes at a European level which had allowed the financial crisis to escalate.
US Federal Reserve chairman Ben Bernanke disappointed investors during late European trading on Thursday when he declined to hint at a third round of quantitative easing to stimulate the economy. Koen De Leus, a strategist at KBC Securities, said:US Federal Reserve chairman Ben Bernanke disappointed investors during late European trading on Thursday when he declined to hint at a third round of quantitative easing to stimulate the economy. Koen De Leus, a strategist at KBC Securities, said:
Bernanke disappointed investors who were looking for some hints about a third round of quantitative easing. Disappointment can also be deduced from a correction in gold prices.Bernanke disappointed investors who were looking for some hints about a third round of quantitative easing. Disappointment can also be deduced from a correction in gold prices.
8.19am: Mixed signals from France, where the budget deficit narrowed but the trade deficit for April came in wider than expected.8.19am: Mixed signals from France, where the budget deficit narrowed but the trade deficit for April came in wider than expected.
The national overspend fell to €59.9bn for January to April, from €61.4bn for the same period last year. Government spending rose 4.2% to €133.6bn, outpacing higher tax receipts, which rose just 2.7% to €91bn.The national overspend fell to €59.9bn for January to April, from €61.4bn for the same period last year. Government spending rose 4.2% to €133.6bn, outpacing higher tax receipts, which rose just 2.7% to €91bn.
However, the trade deficit stands at €5.8bn, higher than the €5.5bn economists had predicted.However, the trade deficit stands at €5.8bn, higher than the €5.5bn economists had predicted.
As Marks & Spencer announces it is to open a bank in the UK, Reuters is reporting the European commission wants to close one in Greece. The EU's sites are trained on Greece's fifth-largest lender, ATEbank, says a report citing EU sources.As Marks & Spencer announces it is to open a bank in the UK, Reuters is reporting the European commission wants to close one in Greece. The EU's sites are trained on Greece's fifth-largest lender, ATEbank, says a report citing EU sources.
The EU has a say in the matter because under state aid rules it can refuse a request to rescue a bank if the Commission considers it too costly to save. The move would mark a more aggressive stance from Brussels, and the same rules would apply to Spanish and Portuguese banks.The EU has a say in the matter because under state aid rules it can refuse a request to rescue a bank if the Commission considers it too costly to save. The move would mark a more aggressive stance from Brussels, and the same rules would apply to Spanish and Portuguese banks.
"We are moving into a new phase with Greece, Portugal and Spain," one source told Reuters anonymously. "Some banks are going to be squeezed. Some are going to be closed down.""We are moving into a new phase with Greece, Portugal and Spain," one source told Reuters anonymously. "Some banks are going to be squeezed. Some are going to be closed down."
Banks central to a country's financial stability may need rescuing, said the source, but others may have to be let go. "ATEbank will have to be closed or wound down over time".Banks central to a country's financial stability may need rescuing, said the source, but others may have to be let go. "ATEbank will have to be closed or wound down over time".
The Greek finance ministry denied the report. No decision is likely until after the country holds elections on 17 June.The Greek finance ministry denied the report. No decision is likely until after the country holds elections on 17 June.
7.45am: Good morning, and welcome to our rolling coverage of the eurozone financial crisis.7.45am: Good morning, and welcome to our rolling coverage of the eurozone financial crisis.
Pressure is building on Angela Merkel act with signs this morning that the eurozone crisis is beginning to impact her electorate. German imports and exports fell sharply in April, according to data published this morning.Pressure is building on Angela Merkel act with signs this morning that the eurozone crisis is beginning to impact her electorate. German imports and exports fell sharply in April, according to data published this morning.
Europe's largest economy is beginning to feel the pinch, with seasonally adjusted imports dropping 4.8%, their worst decline in two years according to Reuters. The numbers will have surprised German economists, who mostly expected the number to remain flat, having falled 0.9% in March.Europe's largest economy is beginning to feel the pinch, with seasonally adjusted imports dropping 4.8%, their worst decline in two years according to Reuters. The numbers will have surprised German economists, who mostly expected the number to remain flat, having falled 0.9% in March.
The fall in exports also accelerated. These were down 1.7%, up from a 0.8% fall in March.The fall in exports also accelerated. These were down 1.7%, up from a 0.8% fall in March.
The news will add fuel to the lively debate on the current edition of the Economist, whose front cover calls on Merkel to restart the engines of a u-boat named the World Economy. The news will add fuel to the lively debate on the current edition of the Economist, whose front cover calls on Merkel to restart the engines the World Economy supertanker.
AgendaAgenda
• 7:45 BST French central government budget balance
• 9:00 BST Italian industrial production update
• 9:30 Bank of England inflation expectations
• 9:30 Producer Prices Index
• 12:30 US trade balance for April		• 7:45 BST French central government budget balance
• 9:00 BST Italian industrial production update
• 9:30 Bank of England inflation expectations
• 9:30 Producer Prices Index
• 12:30 US trade balance for April